Guest Post: Charting The Federal Reserve's Assets - 1915-2012

Here we present a history of the Fed in charts. As you’ll surely glean from the below — the Fed has degenerated from a by and large passive institution (dealing only in high-quality self-liquidating commercial paper and gold) to an active pursuant of junk, an enabler of wars, a ‘benevolent’ combatant of the depressions of its own creation, a central planner of employment & prices and of course a forgiving friend to inconvenient market follies.

Ellsworth: Stay out of this.Deposits here, if we fucking let you make ‘em, are backed by this lady’s gold mine.So do not confuse her with somepaper palace fly-by-night who means “catch me if you can, turn me upside down and whatever falls out of my pants pocket is what’s behind my scrip,” when his note says “Full faith and credit.”

Alma: Thank you, Mr. Ellsworth.

Ellsworth: She’d make the uses of money available for people in the camp ain’t belligerent cocksuckers. Short of following you around with her fucking mine on her back, how else is she supposed to do it?

Wow, the Fed levered 52:1. No fucks wonder why the Plunge Protection Team is working 24/7 to keep the Ponzi from collapsing! All these crooks need to be on chain gangs after the People take America back from the thieving whores.

Looks to me that the Vietnam war is what really got the ball rolling....then Johnson was forced to take the silver out of the currency, and presto nothing was tied to anything....and here we are today.

Thanks for thise charts, Tyler....they portray very clearly what the Fed has been doing, though it would be nice to find out what is in the cats and dogs category of "all other assets"....

Yup. Vietnam was the tipping point where the US went from net creditor to debtor nation. Inflation soon followed and it was an epic struggle to control. Gold window needed to be slammed shut else Fort Knox would be empty

Reuters: For decades, the two-island nation of St. Kitts and Nevis exported sugarcane to keep its economy afloat. When sugar prices fell, St.

Kitts began to sell an even sweeter commodity: its citizenship.

For $250,000, a foreigner can buy full rights as a citizen there. The transaction can take as few as three months and applicants need never visit the nation's sandy shores.

The allure? St. Kitts citizens can travel without a visa to more than a hundred countries, including Canada and all of Europe. They pay no personal income taxes, and the island's remote location in the West Indies serves as a safe haven, should the need for a quick move ever arise.

Dunno any South American havens. But read this from the same article (and understand why this is a growth industry and the haves are all rushing to get 2nd and even 3rd passports...can you say capital flight?)

For nearby Dominica, the basic cost is $75,000.

A third country, Austria, may also offer citizenship for an investment . A provision in the Austrian Citizenship Act states that citizenship can be granted to an applicant if he or she has performed, or would later perform, "extraordinary services" to benefit the Austrian state.

A passport facilitator says: "Today, a person of talent and means need not limit his or her life and citizenship to only one country," reads Henley's website (link.reuters.com/qep36s). "Making an active decision with regard to your citizenship gives you more personal freedom, privacy and security."

A US billionaire's son says: "When (George W.) Bush was elected for the second time, I felt that the country was going to be in such a downward spiral," Bilzerian said. "They were eliminating freedoms, restricting the bill of rights. It's so hard to keep yourself out of trouble. If the IRS thinks you're doing something wrong and audit you, they make your life a nightmare ... they run you to the ground."

I am looking into that. Heard Uruguay and Paraguay. I am working with Brasil. Let you all know what I come up with. Anyway, thanks once again Caviar. I am one of your fans..., I think you should know it!

Hardly South America but invest ~$320,000 in Thailand and it comes with a residence VISA for you and your immediate family.

That's "invest," not "pay."

Lovely land, lovely people, money goes a long, long way... Their economy will prosper due to their proximity to China. About the only thing I don't like about Thailand is that if you develop something that leads to a painful death, it is not the place to be. There is an irrational fear of opiate based pain control.

What are the constituent components of "all other assets"? I would like to see that list. Has the Fed's balance sheet assets surpassed the known/knowable value of all tangible assets? I dare say yes. Most, of course are notes i.e. debt promissories held by interest slaves i.e. you and me. Thus, they own everything.

BAGHOLDER NOT I agree the TRUE loss not FEAR VALUE will be far different maybe 10% when the fed repackages the MBS's and lowers rates below 3% re-inflates the housing market...as allways inflation is key but it looks like the inflation is being exported to China that helps too...operation TWIST AND SHOUT...

Just read "The End of Wall Street" by Roger Lowenstein written in March 2010 and after reading all of the "SubPrime Meltdown Books", I was reminded that the U.S. Government IS the U.S. financial system and vice-versa. That no one at the top is yet in jail STARTING WITH GREENSPAN, is an absolute farce. Why the torches and pitchforks are not marching on Washington as a cross-section of the entire U.S. demographic and ethnographic spectrum is beyond one's imagination. The fraud is incomprehensible. FRAUD. I'm just glad that I live outside the U.S. and am loaded with physical silver and gold along with a hefty amount of well-diversified fiat paper from Canada, Switzerland and Australia. This is NOT going to end well. (Dow 25,000 = $10/gal gasoline)

XtraBullish. Agree with you. Trying to come up with scenarios is much harder with the degree of intervention involved, the fact they 'they are the financial system', the print the money and make the rules. I first thought we would have forced deflation through the natural market force of people liquidating whatever they had to raise cash, the inflation you mentioned is also possible, not sure what the point is other than becoming Italy before the Euro. Not deluded with hopes of changing the system, just not getting crushed in process with everyone else. If its about control, how much more is required? Feds powers have expanded quite a bit, but is it in their best interest for it to collapse or get out of hand? Not sure what they are thinking here, seems that sending people to jail, letting more banks fail, at least allows for some mkt adjustments, maybe even a year or two of lower stock prices but the larger system stays in tact....isnt that easier than risking total unrest Athens style?

Look, austerity for average Joe is one thing, a good thing. But this bank downsizing has got to stop! It's depressing the entire world. Our heroes, our Gurus, the Masters of the Universe....fired and unemployed???

What's a world once the wizards have been outed from behind the curtain? What's a deposed dictator without a people to dictate to? It's enough to break your heart, your spirit and your faith

PSSSST: Come here...I wanna tell you somethin'. It don't make no difference. It's all fucking bullshit anyway. They'll just print more and more and the average person don't even know what the fuck your talking 'bout.

Oh yea, kid, here's a freebie. They'll gas the living shit out the futures all night long on the Greece is saved nonsense.

Watching this is scary, but more disconcerting is not knowing how best to protect yourself from the coming shitstorm. PMs used to be thought to provide shelter but lately that has been questioned. In the end the government can do whatever it wants to. Constitution be damned.

Running a small biz today leads me to believe the black market is going to be the Walmart of the future. I'm sure Walmart will still be around to take your government scrip, I'm also sure your local small arms, real food, and medicine dealers will be very happy to give you value in for your silver.

The government has to be the ultimate source of dumb money. They cut so many blank checks that the real market is now so distorted in America that if they ever take away the crack, there is gonna be major withdrawl. No wonder a college education now costs over $100k -- the government is standing by the cut the check to the money vamps who run the degree mills.

"Coin seigniorage is now being mentioned increasingly on popular blogs as a possible solution to the debt ceiling crisis. It is the only solution currently being suggested that requires no agreement in Congress and also no challenge to the debt ceiling law itself. If Congress fails to increase the debt ceiling by August 2nd, it may even become the constitutional duty of the President to use coin seigniorage to avoid default.

But the proof platinum coin seigniorage alternative comes in more than one flavor. It's actually a class of alternatives. Here are some different con seigniorage proposals.

First, mint a $1.6 Trillion coin and have Treasury use the profits from it to buy all the outstanding debt instruments held by the Fed. This would retire a substantial part of the national debt and immediately create $1.6 T in “headroom” relative to the debt ceiling. This alternative involves the least amount of change in current procedures. The coin, once deposited at the Fed, would remain in a Fed vault, and would not go into circulation. The Government would then go right back to issuing debt in order to meet its debt obligations and spend previous Congressional appropriations. With this alternative it is hard for critics to raise the inflation issue, since the new credits created by the coin are never spent into the economy, but are only used to reduce buy back the debt held by the Fed because that debt counts against the debt ceiling.

One objection made to coin seigniorage proposals is that the high face values of the coins would drive up the market price of platinum. However, the Mint is already scheduled to produce 15,000 platinum coins having relatively small arbitrary face value. There would be no conceivable need for more than enough material for 100 very high face value proof platinum coins. So there really is no supply issue.

Having said that, every time the Mint creates a high value coin for deposit at the Fed, it would have to create a duplicate coin, so that it had the means to swap with the Fed if it ever decided to redeem the coin for currency of equal value. This is not a likely event; but it is possible. So, it would be necessary to create duplicate coins and place them in a vault at the Mint.

A second proposal is to mint a $6.2 T coin to pay back all debt held by the Fed, and all Intra-governmental debt, including that owed to Social Security, Medicare, and a host of other other agencies. That would create $6.2 T in headroom, more than enough to carry us through the 2014 elections. Again, this wouldn't result in any “money” immediately going into circulation, but over time SS and Medicare payments would be adding to bank reserves without any reserves being withdrawn from the system due to debt issuance. Some might think this would be inflationary, because they believe that net reserves added to the private sector are more inflationary than debt instruments added would have been. However, there's evidence that debt instruments provide much higher leverage than added reserves, and, in addition, they lead to greater interest payments than reserves do, even if the Fed decides it wants to pay interest on reserves, which it doesn't always do...."

the fed is not federal...even the name is a lie...it is (as most here know) a privately held bank that through its control of monetary policy creates periods of artificial prosperity and inevitable despair...

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The Fed was not short of money in December 2008. Audited accounts indicate that in just one account (Special Federal Reserve Board Account no. 5525525424AM - account name "Spiritual Wonder Boy") the Fed had black screen standing balance funds well in excess of US$ 2.178 quattuordecillion.

The graphic is a bit misleading; the Fed has no gold reserves at all. It holds $11B in "gold certificates" from the US treasury, which are not an encumbrance on the Treasury's gold at all, just $11B in FRNs.

so what you're saying is that its all a bunch of made up shit? Totally agree, its a big silly game with no rules, no out of bounds, no prosecution, no nothing. We just sit, wait for the next scandal to top the previous one in law-bending-stupidity and enjoy the show.

I believe these charts show assets owned by the Fed. i.e. it actually bought them with printed money.

However, where are the loans made under the discount window reflected? The increase in the USD money supply over time can only have come from the Fed. It will be interesting if we ever see the "shadow" balance sheet as well.

Does anyone have any information or point of view realted to the abvoe question and statements?